Supported by historically low interest rates and rising demand, existing home sales, as reported by the National Association of Realtors (NAR), surged to 13-year high in February after a slight decline in January. Unfortunately, this will mark the high water mark for some time due to virus concerns.
Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, rose 6.5% to a seasonally adjusted annual rate of 5.77 million in February, highest level since February 2007. On a year-over-year basis, sales were 7.2% higher than a year ago.
The first-time buyer share remained at 32% in February from both last month and a year ago. The February inventory level rose to 1.47 million units from 1.40 million units in January but decreased from 1.63 million units a year ago.
At the current sales rate, the February unsold inventory represents a 3.1-month supply, equal to last month but down from a 3.6-month a year ago.
Homes stayed on the market for an average of 36 days in February, down from 43 days last month and 44 days a year ago. In February, 47% of homes sold were on the market for less than a month.
The February all-cash sales shared 20% of transactions, down from 21% last month and 23% a year ago.
The February median sales price of all existing homes was $270,100, up 8.0% from a year ago, representing the 96th consecutive month of year-over-year increases. The median existing condominium/co-op price of $249,900 in February was up 7.0% from a year ago.
Regionally, all regions saw an increase in existing home sales in February except the Northeast, compared to previous month. Sales in the Midwest, South and West grew 0.8%, 7.2% and 18.9%, while sales in the Northeast declined 4.1% from last month. However, on a year-over-year basis, sales rose in all four major regions, ranging from 2.9% in the Northeast to 11.5% in the West.
Although existing home sales remains on an upward trend in February, a recent reduction in buyer traffic indicates that the housing market recovery is likely to be derailed by the coronavirus pandemic. Meanwhile, supported by low mortgage rates and tight inventory, builder confidence remains solid in March, though sales expectations for the next six months dropped four points on economic uncertainty stemming from the coronavirus.